Friday September 2 2022

News Source: Global Exchanges

Focus: Clearing & Settlement

Type: General

Country: Bangladesh

Link: https://bit.ly/3CW8sdI




On 28th August 2022, the Bangladesh Bank (BB) decided to introduce Foreign Currency (FC) clearing and settlement through the Real Time Gross Settlement (RTGS) system.  

BB launched Real Time Gross Settlement (BD-RTGS) system on 29th October 2015 as part of its inclusive digitization initiative. BD-RTGS opened a new horizon in the payment ecosystem, accommodating instant settlement of large value and time critical payments in the country. RTGS system is capable of operating both in local currency and foreign currency.  

Currently, BB is introducing clearing and settlement in 5(Five) foreign currency [US Dollar (USD), Great Britain Pound (GBP), Euro (EUR), Canadian Dollar (CAD), Japanese Yen (JPY)] transactions inside the country. Mentionable that, the Clearing & Settlement of Chinese Yuan (CNY) will be incorporated in the RTGS system soon.  

The features and prerequisites for inland FC clearing through the RTGS system are as follows:- 

  • BD-RTGS is a stand-alone system; no other payment platform is connected to this system. 
  • Banks have to maintain FC Accounts with Bangladesh Bank to originate and receive FC transactions in RTGS system. 
  • RTGS system allows only currency-wise transaction; cross-currency transaction is not allowed. 
  • Any amount of FC transaction can be settled through RTGS system. 
  • AD branches and Head office clearing unit of banks can originate and receive FC transactions in RTGS system.  
  • SOD (Start of Day) Fund transfer, Top-Up and EOD (End of Day) reconciliation will be executed by Forex Reserve & Treasury Management Department of Bangladesh Bank. 
  • To execute customer transaction, Originating Bank has to mention the originator account type as well as beneficiary account type (such as ERQ, SFCAMS, RFCD, NFCD, PFCD, NRB FCY, Airlines, Shipping FCY, Intra-EPZ, Inter-EPZ etc) in the account information field of the instruction. 
  • Originating Bank has to mention the purpose of the transaction properly; this field will be treated as mandatory in case of FC settlement. Bank can also provide additional information in other fields of the message. 
  • Bank can charge maximum BDT100 (Including VAT) or equivalent FC for each transaction from the originator. 
  • Intraday Liquidity Facility (ILF) will not be available for FC transactions in RTGS system 
  • Each Bank will prepare their BCP, operation procedure & guidelines and maintain separate reconciliation team for FC settlement. 
  • Banks shall follow the Guidelines of Foreign Exchange Transactions (GFET) while originating and posting a transaction as and when applicable. 
  • For FC transaction through RTGS system of BD-RTGS System Rules will be relaxed but transaction shall be posted to the beneficiary account within 2 (Two) hours of the settlement instruction from BD-RTGS, otherwise to be returned. 
  • All other rules and procedures of local currency settlement as well as BD-RTGS system Rules will be applicable to FC settlement through the RTGS system. 

Click on the above link for further information